John Parsons (123-45-6781) and George Smith (123-45-6782) are 70% and 30% owners, respectively, of Premium, Inc. (11-1111111), a candy company located at 1005 16th Street, Cut and Shoot, TX 77303. Premiums Selection was made on January 15, 2008, its date of incorporation. The following information was taken from the 2013 income statement. Premiums book income for the year was $704,574.

Interest income $ 100,000

Gross sales receipts 2,410,000

Beginning Inventory 9,607

Direct Labor (203,102)

Direct materials purchased (278,143)

Direct other costs (249,356)

Ending Inventory 3,467

Salaries and wages (442,103)

Officers salaries (150,000)

Repairs (206,106)

Depreciation Expense 15,254)

Interest Expense (35,222)

Rent expense (operating) (40,000)

Taxes (65,101)

Charitable contributions (cash) (20,000)

Advertising expenses (20,000)

Payroll Penalties (15,000)

Other deductions (59,899)

A comparative balance sheet appears below.

January 1, 2013 December 31, 2013

Cash $ 47,840 $ ?

Accounts Receivable 93,100 123,104

Inventories 9,607 3,467

Prepaid Expenses 8,333 17,582

Building and equipment 138,203 185,348

Accumulated depreciation (84,235) (?)

Land 2,000 2,000

Total assets $214,848 $844,422

Accounts payable $ 42,500 $ 72,300

Notes payable (less than 1 year) 4,500 2,100

Notes payable (more than 1 year) 26,700 24,300

Capital stock 30,000 30,000

Retained Earnings 111,148 ?

Total liabilities and capital $214,848 $844,422

Premiums accounting firm provides the following additional information.

Cash distributions to shareholders $100,000

Beginning balance, accumulated

adjustments account $111,148

Using the preceding information, prepare a complete form 1120S and Schedule K-1s for John Parsons and George Smith, both of whom live at 5607 20^th street, Cut and Shoot, TX 77303.If any information is missing, make realistic assumption.